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In U.S., Financial Wellbeing Improves With Age

by Melanie Standish

Optimism about direction finances are headed declines with age

WASHINGTON, D.C. -- Americans tend to feel better about their personal financial situation as they get older. Senior citizens, those aged 75 and older, are the most likely to express positivity about their current finances, while those aged 18 to 64 feel the least positive. Those aged 75 and older are the most likely to say they feel good about the amount of money they have, are satisfied with their standard of living, have more than enough money to do what they want, and have enough money to buy what they need. They are also the most likely to say they did not worry that they spent too much yesterday.

These data, from Gallup Daily tracking interviews conducted Jan. 1-May 2, 2012, reveal that Americans of typical retirement age -- 65 and older -- feel relatively good about how much money they have.

However, the views of those aged 50 to 64, a group nearing retirement, are more in line with -- and often less positive than -- those who are younger rather than those who are older than them. Americans in this age group are the least likely to feel good about the amount of money they have and to be satisfied with their standard of living. Thirty-two percent of 50- to 64-year-olds say they have more than enough money to do what they want to do, matching the views of 18- to 49-year-olds, but far less positive than the 52% of those aged 75 and older who say the same.

Oldest Americans Least Positive About Direction Finances Are Headed

Perhaps not unexpectedly, the oldest Americans are the least likely to believe that their financial situation is improving. For example, the percentage saying their standard of living is getting better declines precipitously from 66% among those aged 18 to 49 to 23% among those aged 75 and older.

This decline may be partly because of older Americans' higher reliance on fixed incomes such as pensions and Social Security, which remain mostly stable over time. Younger Americans, on the other hand, likely believe their incomes will increase in the future because of employment promotions or feeling there are greater opportunities to grow their wealth and therefore improve their standard of living.

While 50- to 64-year-olds are much less likely than those who are older to be satisfied with their current standard of living, they are more likely than their elders to say that their standard of living is getting better.

Implications

Even as many likely saw their home values and retirement funds decline amid the 2008 recession, older Americans are feeling relatively good about their finances compared with those who are younger. Those aged 18 to 64 are struggling the most with their current financial wellbeing. While the unemployment rate among 50- to 64-year-olds is lower and incomes higher than those aged 18 to 49, economic pressures -- perhaps those related to nearing retirement -- may be affecting their sense of financial wellbeing. The decline in defined pension plans and increase in self-funded plans, which may be more affected by market conditions, could also be influencing financial wellbeing for these age groups.

Additionally, those aged 50 to 64 may be more likely to be responsible for the care of elderly parents, as well as contributing to their children's expenses such as higher education. They are closest to the traditional age of retirement, yet they have likely seen a reduction in their retirement investments, and Gallup finds many are worried about having enough money for retirement.

Survey Methods

Results are based on telephone interviews conducted as part of the Gallup Daily tracking survey Jan. 1-May 2, 2012, with a random sample of 117,508 adults, aged 18 and older, living in all 50 U.S. states and the District of Columbia, selected using random-digit-dial sampling.

For results based on the total sample of national adults, one can say with 95% confidence that the maximum margin of sampling error is ±1 percentage point.

Interviews are conducted with respondents on landline telephones and cellular phones, with interviews conducted in Spanish for respondents who are primarily Spanish-speaking. Each sample includes a minimum quota of 400 cell phone respondents and 600 landline respondents per 1,000 national adults, with additional minimum quotas among landline respondents by region. Landline telephone numbers are chosen at random among listed telephone numbers. Cell phone numbers are selected using random-digit-dial methods. Landline respondents are chosen at random within each household on the basis of which member had the most recent birthday.

Samples are weighted by gender, age, race, Hispanic ethnicity, education, region, adults in the household, and phone status (cell phone only/landline only/both, cell phone mostly, and having an unlisted landline number). Demographic weighting targets are based on the March 2010 Current Population Survey figures for the aged 18 and older non-institutionalized population living in U.S. telephone households. All reported margins of sampling error include the computed design effects for weighting and sample design.

In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.

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